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Click here to vote for your favorite (through Friday 10 April).
Imagine several years hence, when the Coronacrisis has passed, and one of the weird outcomes is that we have a new type of "world money." Imagine traveling overseas and not needing to exchange your cash into the local currency: everyone accepts the same "world money." Imagine being a business owner and paying your overseas workers in the same "world money" as you pay your domestic employees. Imagine buying that cool anime collectible that's only available in Japan, directly from the manufacturer, using your "world money."
All these things will be possible with a one-world money, a kind of global currency that is our likely future in the age of Coronavirus.
In last week’s column, we discussed why: The dollar will likely depreciate: the pie is getting bigger but your slice of the pie is staying about the same (we called this "Magic Pie"). The economic downturn will be prolonged and severe: debt is stacked on top of debt (we used the Twitter meme of "broke bitches"). There will be cascading effects: these will create unexpected collapses around the world (using the "Jenga tower" example from the movie The Big Short).
Then we pointed to the possibility of a new type of global money.
Overseen by the International Monetary Fund (which is like the United Nations of money), this new "global currency" will be freely transferable anywhere in the world. Nations will still have their own money (you can still keep your dollars), but the new global currency is the final authority. The buck, literally, stops here. |
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The buck, literally, stops here.
This idea of a "World Money" is nothing new. In the days after World War II, the great economist John Maynard Keynes proposed the "Bancor," a kind of global credit that could be used as a settlement account between nations. In more recent times, Nobel Laureate Joseph Stiglitz has proposed a stable store of international value that he calls the "Global Greenback." Mark Carney, the former Governor of the Bank of England, calls for a world currency which he gives the unsexy name of "multipolar IMFS."
Add to these voices the rising chorus of blockchain experts calling for a similar idea. The leading project of course is Libra, a blockchain-based "world currency" that is based on a basket (or mix) of existing currencies. Yanis Varoufakis, the former Greek Minister of Finance, has called for a revival of the Keynes proposal, but stored on the Kosmos blockchain. Jeremy Allaire, Chairman and CEO of Circle, has predicted that G20 nations will "consider and ultimately support the development of a new global digital currency unit."
Allaire points out that money should just be another form of data on the Internet. And by using blockchain technology to make programmable money, "we may witness an unprecedented amount of creativity and innovation in how finance and economic activity takes place around the world."
"We are rapidly moving towards a world of borderless money and value exchange," he predicts. "This infrastructure has the potential of providing a global public good that all people, firms and nations can build on for governance and economic activity."
In other words, we have to transcend our nationalistic thinking and imagine what can be built for the economic good of the world. It’s like the Coronavirus has opened a portal to another dimension, one of economic inclusion and prosperity. But we have to jump through the portal, NOW.
It starts with a name. When we name something, it becomes a thing in our mind. We can then think about it, discuss it, and improve it.
So what should we call this new global money?
Our Contest to Name the New World Money Last week, we issued a "call for names." The winner gets a signed copy of my book -- as well as bragging rights for, you know, naming the new world currency.
We got quite a few responses, and narrowed them down to the top 10 (in the order we received them): Gaia (Evan Karnoupakis). Gaia is traditionally the personification of the Earth. WOC (Dr. Michelle Augustine). Short for “World Currency.” OneCoin (Liciniu A. Kovács). Liciniu created a companion logo as well. PEND (Jude Seyi). Short for “Pandemic Earth New Dollar.” Terran (Morné Assam). Terra means “Earth” in Latin. Ciat (Will Weddleton). Cryptocurrency + Fiat = Ciat. 1 Money (Leve Salazar). Also a great rapper name. UniCoin (Chuck Coffey). He also suggested “InfiniCoin.” Common Currency (Jennie Legary). Abbreviated “ae,” from the Latin “Monetae Communia.” UDC (Vaman Ramlall). Short for “Universal Digital Currency.”
It seems only fitting that the global community should vote on the name for its new global currency. So we'll be opening it for global voting through next Friday 10 April. Pass it along to everyone you know.
One money for one world. Vote for your favorite here.
Health, wealth, and happiness, |
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| John Hargrave Publisher Bitcoin Market Journal |
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In times of deep crisis such as this it's important to stay true to who we are and that seems to get more and more difficult the deeper we get.
Last night, I engaged in an interesting discussion on social media when Bruce Fenton posed the question "Are mandated lockdowns right or wrong?"
This is something that another bitcoin though leader, Jimmy Song, is on record as being staunchly against and the libertarian in me tends to agree. |
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Jimmy's point here is simply that a pattern has arisen throughout history and some of the most notable authoritarian governments have started out by stripping freedoms often temporarily at first and for a good reason but then the changes gradually become permanent.
However, it does seem like Song is in the minority here. Following Bruce's live stream last night, I decided to poll the audience with striking results. |
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So it seems that most people feel the propensity to save lives overpowers the need to maintain personal freedoms.
Very likely, tracking the disease by use of mobile phones will become quite commonplace sometime soon.
As traders, we're constantly faced with these type of dilemmas. Is it OK to profit on the downside of the market while so many people are losing their jobs? Normally, I wouldn't be one to go long on crude oil for idealistic reasons, yet it's been one of my best positions over the course of the week.
Sure, I could probably justify that by saying that it's extremely low right now and that is dangerous for a lot of people, but then I'd have a lot of trouble explaining why I was short last month. Of course, my insignificant struggles are nothing compared to those that some medical workers and large business owners are facing at the moment.
Circumstances are very difficult at the moment for many people and I hope that we're all making the right decisions. |
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The Curve
As we've stated many times already, if you want to know what the markets are going to do, you need to watch the virus. All the volatility is coming from the uncertainty surrounding the disease. Only once we get a better understanding of how long the lockdowns will last and what life might look like afterward, will we really get some trends that are investible for the long term.
One bit of good data can be seen from Italy and though I'm not a doctor, the graph does seem to be indicating that they're finally over the hump as the number of new confirmed cases has been coming down quite steadily for the last two weeks. |
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| It seems the mandated police-enforced lockdowns have indeed been helping save lives. Unfortunately, the graph from Spain doesn't look quite as nice but still does seem like it could possibly be forming a top. Spain has now overtaken Italy to be the country with the second most confirmed cases, behind the U.S. |
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Of course, neither country can really let their guard down at this point. As we've seen in Asia, once the lockdowns start to ease the chances of a relapse skyrockets.
So this problem will likely only be solved with the invention of a very efficient treatment or a widespread vaccine and that doesn't seem likely to happen very quickly. Still, it's good to know that the testing and quarantines are doing the job. |
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My Jobs Blunder
The data has come out and it's not pretty but many analysts are calling it a non-event. |
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The expectation provided by analysts who are smarter than myself was for a decline of only 100,000 jobs in March. Now, I would like to take this opportunity to apologize for my estimate from yesterday. What I learned today is that the monthly jobs report that I've been trading on for many years actually doesn't correspond to the months of the Calendar, even as indicated in the above headline.
The survey conducted by the Bureau of Labor Statistics is actually conducted around the middle of the month and only reported on the first Friday of the next month, about two weeks later. Therefore, the ~10 million people who recently began filing unemployment claims are not counted at all in the above figure and will only show up in the unemployment rate in a month from now in April's report.
You learn something new everyday but since it's my goal in these newsletters to bring you accurate information, I feel an apology is indeed in order. As a punishment, I won't shill out the links below today and will not encourage you to share today's episode with your friends and family. I will welcome anybody who's reading this for the first time but will not ask you to subscribe.
Have a relaxing weekend. Don't forget to wash your hands and if you do need to leave the house wear a mask and gloves!!
Best regards, |
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Mati Greenspan Analysis, Advisory Money Management |
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